Section 139 to 142 of CGST Act Provide for transitional provisions for shifting from existing tax system to GST. Existing registered persons will be given provisional registration under GST. Once they submit required details, the registration will be final. The procedure for granting provisional GST registration numbers has already commenced.
The dealers (traders ) are not liable to pay excise duty at present. If they are not eligible to get input tax credit of excise duty paid by them on stock with them on 30.06.2017, they would try to reduce their inventory as on 30.06.2017.
Similarly service providers who were not registered with State VAT would have stock of goods as on 30.06.2017, on which they will be liable to pay GST after 1.7.2017. They would also have tried to reduce their stock as on 30.06.2017.
Now, section 140 of CGST Act is quite clear that such dealers can avail input tax credit in respect of goods in stock with them as on 1.7.2017 on which VAT and /or excise duty has been paid and for which they have duty paying documents, which are less than 12 months old i.e. invoices issued on are after 1.7.2017 will be eligible for input tax credit.